Economy Watch: Demand For Skilled Nursing Facilities Edges Up in Q1

The percentage of Medicare patients among the overall mix of patients is also increasing, according to the National Investment Center for Seniors Housing & Care, reflecting the growing important of Medicare within the skilled nursing sector.

Occupancy at U.S. skilled nursing properties increased to 82.6 percent at the end of the first quarter of 2017, up 36 basis points from the previous quarter, but down 163 basis points year-over-year, according to the National Investment Center for Seniors Housing & Care (NIC). The quarterly upward movement early in a calendar year isn’t unusual, said Bill Kauffman, senior principal at NIC.

“The first quarter data typically shows an uptick in occupancy due to seasonal factors, such as the flu,” he noted in a statement about the organization’s most recent Skilled Nursing Data Report, which was released recently. In fact, during 2015 and 2016, the first quarter represented the high point for occupancy in each year.

“We will be watching the data carefully to see if the decline continues into the second quarter,” he continued. “Considering the current environment in post-acute care, competition for Medicare patient days is higher than at any time in recent memory for skilled nursing property operators. Occupancy could feel additional pressure until the supply and demand equation comes into better balance.”

The percentage of Medicare patients in the overall mix of patients is also going up, according to the report. That percentage increased on a quarter-over-quarter and year-over-year basis, while Medicare revenue per patient day increased quarter-over-quarter for the first time in two years.

The current report shows the growing importance of Medicare within the skilled nursing sector. Paying attention to Medicare trends will become ever more important as nearly half of all seniors may be enrolled in managed care over the next 10 years, the NIC report predicted.

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